You know, that's actually a very good point that didn't cross my mind for some reason. XCOM in harder difficulties if all about setting up the perfect Alpha Strike to take down the most dangerous threats before the enemy even gets a turn. Good players even know how to abuse the way opponents move when combat starts, by placing your soldiers in flanking positions before triggering the fight. It... somewhat makes sense in XCOM, because you're doing infiltration most of the time - so you're "surprising" the enemy and killing them before they react.
This is one of the biggest criticism I had in Mutant Year Zero too - it was all about Alpha Strikes. Spot a patrol, wait for them to split, kill one disable another, get out of combat (resetting the cooldowns on your skills). Rinse and repeat.
In Fire Emblem & VC, combat start as soon as you deploy on the map. So the problem of Alpha Striking is a little less present (although you can easily abuse AI by camping right outside their range and send one bait, have all opponents attack the tank, next turn you slaughter them).
With individual initiative, these problems don't disappear - but they do get lessened. It's harder to abuse your enemies because each member of your party acts at different times, and one monster playing between two of them can ruin your plans.
That being said, party initiative makes sense for BG3 for a very good reason - multiplayer. Allowing every player to act at the same time significantly cuts down the time needed for combats, which is an issue every D&D player encountered on tabletop in the past (unless you exclusively play with veterans who know exactly what they want to do). However, I also think you're onto something with the "players will just reload until they win initiative". We all know those games where there is a large RNG factor in a hard fight, and people are just "if the boss uses X skill twice in a row, just reload" - here we might end up with "if the boss won initiative, you're boned, reload".
All and all, no best solution here. But I'd be lying if I said I wasn't interested in seeing how it plays out for BG3.